Ohio Building Products (OBP) is considering the launch of a new product which would require an initial investment in equipment of $30,800 (no investment in working capital is required). The forecast profits from the product are as follows:

	Year 1	Year 2
Net revenues	$23,337	$22,152
Depreciation	13,860	16,940
Pretax profit	9,477	5,212
Tax at 35%	3,317	1,824
Net profit	$6,160	$3,388

No cash flows are forecast after year 2, and the equipment will have no salvage value. The cost of capital is 10%.

a. What is the project's NPV?

Project's NPV $ X

b. Calculate the expected EVA and the return on investment in each of years 1 and 2.

	Year 1	Year 2
EVA	$ X	$ X
ROI	% X	% X

c-1. Calculate the present value of the economic value added.

PV of EVA $ X

d. What would be the EVA and return on investment if OBP chooses instead to depreciate the investment straight line?

	Year 1	Year 2
EVA	$ X	$ X
ROI	% X	% X